Real Estate CPA In Dallas
Are you a property owner looking to save money? Many property owners and investors miss valuable tax-saving opportunities simply because they are not aware of how real estate tax rules work. From maximizing mortgage interest deductions to applying advanced depreciation strategies, working with a knowledgeable real estate CPA Dallas firm can significantly improve your after-tax returns. Whether you are a first-time investor or managing a growing portfolio, our team helps simplify complex tax rules and turn them into actionable savings. As a trusted CPA for real estate investors Dallas, we focus on helping clients reduce tax liability, improve cash flow, and stay compliant with IRS regulations. Our guidance is practical, strategic, and tailored to real estate owners who want to protect and grow their investments.
Mortgage Interest Deductions:
Mortgage interest deductions remain one of the most valuable tax benefits available to property owners. If you own real estate, you may be able to reduce your taxable income by deducting interest paid on qualifying loans. This includes mortgages used to acquire, build, or substantially improve property. Under current tax rules, homeowners who purchased property after December 15, 2017, may deduct interest on up to $750,000 of mortgage debt. For example, if you paid $10,000 in mortgage interest during the year, that amount could directly reduce your taxable income. For real estate investors, understanding how interest deductions apply across multiple properties is essential for accurate tax planning. Working with a real estate CPA accounting services provider ensures these deductions are applied correctly while staying within IRS limits.
Energy Efficiency Upgrades :
Energy-efficient upgrades can benefit property owners in more ways than one. In addition to reducing operating costs, many improvements qualify for federal or state tax credits. These may include installing solar panels, upgrading windows, improving insulation, or adding energy-efficient HVAC systems. Certain credits may allow property owners to recover a percentage of the upgrade cost directly through tax savings. For example, eligible solar installations may qualify for credits of up to 30 percent of the total project cost. That means a $10,000 upgrade could result in $3,000 in tax savings. A real estate CPA Dallas can help determine which improvements qualify and ensure credits are properly documented and claimed.
Capital Gains Exclusion For Selling The Primary Residence
When selling a primary residence, homeowners may qualify for a significant capital gains exclusion. If you owned and lived in the home for at least two of the past five years, you may exclude up to $250,000 of gain from taxable income, or up to $500,000 for married couples filing jointly. For example, if you purchased a home for $300,000 and later sold it for $550,000, the $250,000 gain could potentially be tax-free for a single filer. Proper planning and documentation are essential to meeting eligibility requirements. Our team regularly assists homeowners and investors with tax preparation Dallas, TX, ensuring gains are reported correctly while maximizing allowable exclusions.
Cost Segregation Study
A cost segregation study is a powerful tax planning strategy for real estate investors looking to accelerate depreciation. Through this process, certain building components are reclassified into shorter depreciation lives of 5, 7, or 15 years instead of the standard 27.5 or 39 years.
This acceleration increases early-year depreciation deductions, which can lead to higher cash flow and reduced tax liability. Cost segregation is especially effective for commercial properties, multifamily buildings, and properties that have undergone renovations.
As a CPA for real estate investors Dallas, we coordinate cost segregation studies to ensure compliance, proper documentation, and maximum benefit.
Installment Sales
An installment sale allows property owners to spread capital gains over multiple years rather than recognizing the full gain in the year of sale. This method can help manage tax exposure by matching tax liability with cash received.
For example, if land is sold for $100,000 with a $20,000 down payment and the remainder paid over several years, only the portion received each year is taxed. This strategy cannot be used to report losses, but it can significantly reduce the immediate tax burden for qualifying transactions.
A knowledgeable small business CPA Dallas can help determine whether an installment sale aligns with your broader tax and investment strategy.
A 1031 Exchange
A 1031 exchange allows investors to defer capital gains taxes by reinvesting proceeds from a property sale into another qualifying property. This strategy helps preserve investment capital, increase purchasing power, and support long-term portfolio growth.
Benefits of a 1031 exchange include tax deferral, improved cash flow, diversification, and estate planning advantages. When structured properly, continued use of 1031 exchanges may also result in a step-up in basis for heirs.
Because timelines and documentation are strict, working with an experienced real estate CPA near me ensures compliance and protects the full value of the exchange.
Depreciation on Properties
Depreciation allows property owners to deduct the cost of a property over its useful life, even if the asset appreciates in market value.
1. Residential rental properties are typically depreciated over 27.5 years.
2. Commercial properties are depreciated over 39 years.
3. Certain assets within a property may qualify for accelerated depreciation.
Understanding depreciation schedules is essential for accurate tax reporting and long-term planning. Our real estate CPA accounting services help ensure depreciation is calculated correctly and optimized across your portfolio.
Repairs Vs Improvements
Understanding the difference between repairs and improvements is critical for tax reporting. Repairs are expenses that keep a property in normal operating condition and are typically deductible in the year incurred.
Improvements, on the other hand, increase the value of the property or extend its useful life. These costs must be capitalized and depreciated over time. Proper classification affects both current deductions and future depreciation.
We help investors correctly categorize expenses to avoid IRS issues and maximize allowable deductions.
Rental Property Deductions
The 3 Safe Harbors That Every Investor and Landlord Should Know About are:
De Minimis Safe Harbor (DMSH)
The De Minimis Safe Harbor, enacted in response to the IRS repair regulation issued in 2013, allows landlords to deduct any cost substantiated by invoices, as long as each cost does not exceed $2,500 ($5,000 if applicable financial statements are available). The DMSH originally had a $500 limit in 2013, but the IRS later increased it to $2,500.
Routine Maintenance Safe Harbor
Also stemming from the IRS repair regulation of 2013, the Routine Maintenance Safe Harbor allows landlords to currently deduct qualifying routine maintenance expenses, regardless of cost. There are no annual dollar limits, making it a valuable tool for any landlord, regardless of income levels.
Safe Harbor for Small Taxpayers (SHST)
The SHST, the third safe harbor resulting from the IRS repair regulation, enables landlords to currently deduct all annual expenses for repairs, maintenance, improvements, and other rental building costs on Schedule E. To qualify for SHST, landlords need to meet specific restrictions, including rental business size limitations.